What is Health and Dental Insurance?

August 22nd, 2011 | Author: Mitch Reynolds

What is Health and Dental Insurance and How Does It Work?

This article, what is health and dental insurance, is the seventh and last article in a series of articles explaining the fundamentals of how different insurance products work. To get a full list of all articles, please got to What is Insurance for the series overview.

Definition of What is Health and Dental Insurance

What is health and dental insurance? It is an insurance policy against the risk of incurring medical expenses for individuals or families. In Canada, with universal health care, these financial risks are minimized but there are still many things your provincial health care plan will not cover. This is where supplemental health and dental insurance will fill the gap and provide extensive risk protection from unforeseen and expensive medical bills.

An insurance company in Canada can develop a health and dental insurance plan that will cover medically necessary services that are not included in the provincial health care plan. This is done by looking at the entire provincial population based on age, gender, smoking status, and expected medical usage. Then pricing can be determined for people in different age groups and other factors. There are usually discounts for whole families to sign-up a plan together vs each person owning their own insurance policy.

Group insurance also covers supplemental health and dental insurance. When you are a member of a group insurance plan you usually have prescription drug coverage, medical equipment and services coverage and dental insurance.

What is not covered by your provincial health care plan?

The Canada Health Act mandates that all provinces must provide free access to “medically necessary services”. These services are basically defined as access to a physician or hospital and the nursing care in a long term care facility. There are, however, many expenses that are not covered under the provincial health care plan:

Prescription drugs dispensed through a local pharmacy (not from the hospital)
Non-emergency dental care (preventative and restorative dental treatments)
Ambulance rides
Medical services like chiropractic treatments, physiotherapy, massage therapy, psychologist, etc.
Medical equipment, like walker, canes, crutches, oxygen tanks, etc.
Vision care (eye exams and glasses)
Hearing aids
Private or semi-private hospital rooms
Out of province travel medical insurance (within Canada there are inter-provincial agreements for medical expenses)

Universal and free health care in Canada does not cover everything. Luckily for Canadians, the big medical expenses like hospital care and visiting a doctor are covered. There are also many health care sponsored programs for in home care, people dealing with mental illness, childhood developmental support, etc. which are also covered by the provincial health care plans (to varying degrees in different Canadian provinces).

The common expenses listed above can also add up to considerable monthly expense. Knowing that you will not have to pay 100% of the cost of drugs or dental care gives most Canadians peace of mind that they can access the medical treatment they need and remain within their monthly budgets.

How health and dental insurance works

A health and dental insurance policy usually works by having a covered expense submitted to the insurance company for reimbursement. Modern technology has helped make many of these claims quicker and easier. Instead of the individual paying for the expense and then mailing in claim forms (the old way of making a claim) a pharmacy or dental office can electronically submit the claim on your behalf and the covered portion of the claim is paid directly to their business.

Some medical practitioners can not yet do this, like massage therapy and physiotherapists. In this case there is either the old mail in claim forms or now online claims processes that make submitting your claim a snap.

Co-Pay: Many insurance plans do not pay 100% of the claim. They will cover 80% for instance. The 20% that the individual has to pay is called the co-pay portion. This co-pay amount is put into policies to help control expenses. The theory is that if people have to pay any amount of money, even if it is a small percentage of the total cost, they will think twice if they really need the medical treatment or not before spending money. Hopefully, the co-pay portion of your policy never holds you back from seeking the treatment and medicine your need to feel healthy again!

Maximum benefits: Another way to control costs is by having annual and/or lifetime maximums on the policy. These maximums will prevent people from incurring a huge medical expense in one year and then cancel their policy the next year and stop paying premiums. The most common place people see annual maximums is on their dental insurance coverage. The amount the insurance company is willing to pay out is based on the how old the policy is and the level of coverage purchased. A more complete dental insurance plan covers restorative dental like crowns, bridges, on lays, etc. A standard dental insurance plan will only cover regular maintenance, like cleanings, check-ups, fillings and extractions. The maximum annual payout is usually set lower in the first year of the policy and then increases into years two and three. This allows the insurance company to collect 1 or 2 years premiums before reimbursing for the most expensive dental procedures.

Why you need health and dental insurance

Why do you need health and dental insurance if the Canadian government pays for all major expenses like hospital care? It is well documented that people without supplemental health and dental insurance tend to have a lower quality of overall health. There are still significant financial barriers to getting the treatment and medication needed to function properly without health insurance. Dental care can be put off, allowing problems to grow from minor preventative issues in emergency dental care treatments requiring hospitalization. People who are on a budget and can’t afford prescription drugs tend to have more medical problems than those who can get the medication they need to feel better.

What is Health and Dental Insurance – Find out more from Life Guard Insurance

If you are without health and dental insurance and can fit this kind of premium into your monthly budget, you would be advised to have coverage vs going without. If you are interested in finding out more about health and dental insurance in your province, feel free to contact Life Guard Insurance.

The article was written by Mitch Reynolds+. If you found this article interesting or it made you think, please feel free to share your comments below. Liking us on Facebook, giving us a +1 on Google or Tweeting this article, What is Health and Dental Insurance, would also be very much appreciated.